According to a report in Sunday paper City Press, President Jacob Zuma and his family are trying to get a home loan to pay the R7.8 million that Treasury calculated are his outstanding debts for nonsecurity upgrades at Nkandla.
According to reporter Setumo Stone, a little-known black-owned bank called VBS Mutual Bank has been approached by the family to provide the loan. The sources for the article are apparently “family associates and several people close to the discussions”.
Negotiations were said to be at an advanced stage “after the bank and Zuma’s lawyer, Michael Hulley, agreed to terms at a meeting in Sandton last Wednesday”.
Zuma still has another outstanding loan with FNB, though, that will need to be settled first, the report added.
The Sunday Times reported at the start of July that the Zuma family was claiming they were too poor to pay the R7.8 million for items including a swimming pool, amphitheatre, cattle kraal and chicken run. Public Protector Thuli Madonsela found that at least R216 million was spent by the state at Nkandla and almost every item was hugely inflated. A government team comprising several experts eventually settled on the R7.8 million the president was personally liable for, which opposition parties have complained is less than 4% of the amount spent by taxpayers and too little.
Wealthy businessmen who had in the past been very open about their willingness to help the president said they did not intend to contribute to an Nkandla fund. ANC insiders reportedly said that the appetite to help Zuma was now on the wane because he had no prospect of a third term as president and was “on his way out”. His ability to dispense future patronage was therefore in doubt.
The ANC for its part, through secretary-general Gwede Mantashe, said that it would not be raising funds to pay for Nkandla, as this was supposedly forbidden by the Constitutional Court. Mantashe said that “a structure of the ANC cannot do that because if it’s traced … it will be in contempt of court”. The ANC is interpreting Chief Justice Mogoeng Mogoeng’s directive that Zuma must repay the money “personally” as literally as possible. A lawyer has, however, pointed out that Zuma is entitled to receive donations to repay the amount, but would then be liable for donations tax. At 20%, Zuma would need to be given about R11 million in donations to find himself in the clear.
However, the Mail & Guardian calculated that Zuma could make an 85% profit from the sale of Nkandla even after repaying the R7.8 million. He has until the end of August to find the money.
According to City Press, therefore, the Zuma family had considered the possibility of refinancing the Nkandla property, since it is now a lot more valuable, post-upgrades. It, however, appears to have opted for another outright loan as the simpler solution, which would also make Zuma one of the bank’s biggest clients.
Zuma’s wealthy nephew Khulubuse Zuma has financial problems of his own after being found personally liable with other directors for R1.5 billion lost at the Aurora gold mine. Zuma’s son Duduzane has shares in companies worth billions through his links with the Zuma-allied Gupta family, but the family has been under fire for several months due to alleged state capture, and no South African banks are willing to service the family’s companies.
Zuma was given 45 days to repay the money and the deadline is September 25.
VBS spokesperson Gugu Mthembu declined to comment to City Press’ enquiries. Zuma family spokesperson Edward Zuma also claimed that he had no knowledge of the loan discussions. Zuma’s lawyer merely said that Zuma was “making arrangements so that he can pay”.